Contrary to California’s ruling in Gomes, a MERS has come under fire in Utah. In Harvey v. Garbett Mortgage, Utah 3rd Dist. Case No. 100907587 (2010) (unpublished) (Herinafter Harvey), quiet title action resulted in a deed clear of any liens because the trustee, the legal title holder, did not have any idea who the beneficiary was, did not have physical possession of the mortgage note, and did not know whether a split of the note and trust deed occurred. The plaintiff quickly sold the property after the ruling, and thus has no interest in the land. The loan is now unsecured, and the plaintiff is still liable to the lender to pay the debt. An interesting procedural note about the Harvey case is that the plaintiff did not name MERS as a defendant in this case, even though MERS was the nominal beneficiary, because MERS did not have any actual interest in the property. However, this strategy would not be successful in California, because MERS has standing to foreclose, has a statutory created interest in the land, and a quiet title proceeding is final and binding only upon named defendants.

CONCLUSION:

In California, a quiet title action brought by a mortgage borrower in default against a lender will not result in free property. Courts quickly dismiss quiet title actions without any allegation of wrongful practice by the lender. However, a quiet title action in conjunction with a claim of wrongful foreclosure can allow a homeowner stay in their house for an extended period. A debtor in receipt of a notice of default must act quickly if they want to stay in their home. The first steps of filing a complaint and applying for an injunction require technical legal knowledge and sharpened persuasive ability; two characteristics that cannot be learned by the homeowner fast enough to prevent eviction. The homeowner should seek counsel from an experienced attorney regarding the possible benefits and costs of offensive legal action

Many Californians in default on their mortgage and facing foreclosure have filed quiet title and wrongful foreclosure actions. What is a quiet title action against a lender, and are plaintiffs successful in California?

BRIEF ANSWER:

A quiet title action in California to determine the owner of property does not generally allow a mortgage borrower in default on their payments to claim title to the land free of liens. However, the action when combined with a wrongful foreclosure claim is often successful in extending the amount of time a defaulted borrower can remain in the house. While in essence, this is simply prolonging the inevitable, it can give a borrower a temporary feeling of control over their own destiny.

A cause of action to quiet title seeks to determine adverse claims to real or personal property. (Cal. Code Civ. § 760.020.) The action is commonly commenced by homeowners when a lender wrongfully forecloses on their property. My research has not found a favorable California decision quieting title in a mortgage borrower challenging foreclosure. The filing of quiet title actions only prolongs the amount of time a borrower can remain in a house after defaulting.

Theory behind the current suits

The UCC governs negotiable instruments such as mortgages, and it defines a loan as a transferable, signed document that promises to pay the bearer a sum of money at a future date or on demand. Most mortgages are made by investment banks, who then package many similar loans into a mortgage backed security and sell the securities. To convert the mortgages into stocks, each mortgage note must be destroyed. A mortgage and a stock certificate cannot exist at the same time. This creates a gap in the chain of title, and theoretically making the loan invalid. As a result, homeowners can fight foreclosure through a quiet title action and receive clear title. The current trend to argue a break in chain of title is weak, because a “plaintiff may recover only upon the strength of his or her own title, however, and not upon the weakness of the defendant’s title.” (Ernie v. Trinity Lutheran Church (1959) 51 Cal.2d 702, 706.)

A promissory note is usually secured by a deed of trust in the real property. The trust names the security owner as the beneficiary and a loan servicer as the trustee. A trust is a form of ownership in which the legal title of a property is vested in a trustee, who has equitable duties to hold and manage it for the benefit of the beneficiaries. (Restatement of Trusts, Second, §2 (1959).) The trustee under a valid trust deed has exclusive control over the trust property. Usually, the lender records a deed of trust with the county to secure the loan to the debtor. The deeds identify the trustee, and most often identify Mortgage Electronic Registration Systems (MERS) as the nominal beneficiary.

Challenges to MERS

MERS is a company created by the banking industry to bypass recording statutes and filing fees. MERS records who currently owns the notes on a mortgage. A foreclosure may be brought in the name of MERS, and the trustee may act on behalf of MERS to effectuate a non-judicial foreclosure. MERS may also directly initiate a foreclosure proceeding, and California’s “statutory scheme (§§ 2924–2924k) does not provide for a preemptive suit challenging standing.” (Robinson v. Countrywide Home Loans, Inc., (2011) 199 Cal. App. 4th 42, 46.)

The MERS system of foreclosure has been upheld in California based upon two rationales. First, courts have held that MERS, acting as the agent of the beneficial owner, does not need to prove authorization by the beneficiary to foreclose. (Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal.App.4th 1149, 55-56.) Second, contract law legitimizes the system, because recent deeds of trust require that the borrower agree that MERS can proceed with foreclosure in the event of default. (Id. at 1157.)

Procedural Requirements for Plaintiffs

California mortgagors must file in the Superior Court, which has the authority to grant the equitable relief of quieting title in an individual. (Cal. Code Civ. §760.040.) Once a party has filed the action, they must file a notice of pendency with the office of the county recorder. (Id. §762.010(b).) This notice puts all other parties who are claiming the party on notice that the plaintiff is claiming the land as his, and stops any transfers of the property during the lawsuit.

To survive a demurer, A plaintiff must file a verified complaint that includes: (1) A legal description and street address of the subject real property; (2) The title of plaintiff as to which determination is sought and the basis of the title; (3) The adverse claims to the title of the plaintiff against which a determination is sought; (4) The date as of which the determination is sought; and (5) A prayer for the determination of the title of the plaintiff against the adverse claims. It is highly likely that a claim merely alleging that the plaintiff has an interest in the land will not make it past a demurer. (See Mangindin v. Washington Mut. Bank, 637 F. Supp. 2d 700, 712 (N.D. Cal. 2009) (Dismissing claim merely alleging plaintiff had an interest in land foreclosed upon by bank).)

Tender Rule

A plaintiff seeking to quiet title in the face of a foreclosure must allege tender, which is “an unconditional offeror an offer of performance of their obligations under the Note, made in good faith, with the ability and willingness to perform.” The “Tender Rule” is derived from several cases involving disputes between junior and senior lienholders. (See Arnolds Mgmt. Corp. v. Eishen (1984) 158 Cal. App. 3d 575, 580; FPCI RE-HAB 01 v. E & G Investments, Ltd. (1989) 207 Cal.App.3d 1018, 1022.)

The policy behind the rule is that it would be a useless act to set aside a foreclosure sale based upon a procedural defect when a mortgage borrower cannot redeem the property in absence of that defect. (Karlsen v. American Sav. & Loan Assn. (1971) 15 Cal.App.3d 112, 118.) Some courts interpret the Tender Rule to only require that the mortgage borrower tender delinquent pre-foreclosure payments prior to any claim of quiet title. (Id. at 117; Ghervescu v. Wells Fargo Home Mortg., Inc., 2005 WL 6559918.)

Posted by Foreclosure Fraud on June 6, 2010
(St. George, UT) June 5, 2010 – A court order issued by Fifth District Court Judge James L. Shumate May 22, 2010 in St. George, Utah has stopped all foreclosure proceedings in the State of Utah by Bank of America Corporation, ; Recontrust Company, N.A; Home Loans Servicing, LP; Bank of America, FSB; http://www.envisionlawfirm.com. The Court Order if allowed to become permanent will force Bank of America and other mortgage companies with home loans in Utah to adhere to the Utah laws requiring lenders to register in the state and have offices where home owners can negotiate face-to-face with their lenders as the state lawmakers intended (Utah Code ‘ 57-1-21(1)(a)(i).). Telephone calls by KCSG News for comment to the law office of Bank of America counsel Sean D. Muntz and attorney Amir Shlesinger of Reed Smith, LLP, Los Angeles, CA and Richard Ensor, Esq. of Vantus Law Group, Salt Lake City, UT were not returned.

The lawsuit filed by John Christian Barlow, a former Weber State University student who graduated from Loyola University of Chicago and receive his law degree from one of the most distinguished private a law colleges in the nation, Willamette University founded in 1883 at Salem, Oregon has drawn the ire of the high brow B of A attorney and those on the case in the law firm of Reed Smith, LLP, the 15th largest law firm in the world.

Barlow said Bank of America claims because it’s a national chartered institution, state laws are trumped, or not applicable to the bank. That was before the case was brought before Judge Shumate who read the petition, supporting case history and the state statute asking for an injunctive relief hearing filed by Barlow. The Judge felt so strong about the case before him, he issued the preliminary injunction order without a hearing halting the foreclosure process. The attorney’s for Bank of America promptly filed to move the case to federal court to avoid having to deal with the Judge who is not unaccustomed to high profile cases and has a history of watching out for the “little people” and citizen’s rights.

The legal gamesmanship has begun with the case moved to federal court and Barlow’s motion filed to remand the case to Fifth District Court. Barlow said is only seems fair the Bank be required to play by the rules that every mortgage lender in Utah is required to adhere; Barlow said, “can you imagine the audacity of the Bank of America and other big mortgage lenders that took billions in bailout funds to help resolve the mortgage mess and the financial institutions now are profiting by kicking people out of them homes without due process under the law of the State of Utah.

Barlow said he believes his client’s rights to remedies were taken away from her by faceless lenders who continue to overwhelm home owners and the judicial system with motions and petitions as remedies instead of actually making a good-faith effort in face-to-face negotiations to help homeowners. “The law is clear in Utah,” said Barlow, “and Judge Shumate saw it clearly too. Mortgage lender are required by law to be registered and have offices in the State of Utah to do business, that is unless you’re the Bank of America or one of their subsidiary company’s who are above the law in Utah.”

Barlow said the Bank of America attorneys are working overtime filing motions to overwhelm him and the court. “They simply have no answer for violating the state statutes and they don’t want to incur the wrath of Judge Shumate because of the serious ramifications his finding could have on lenders in Utah and across the nation where Bank of America and other financial institutions, under the guise of a mortgage lender have trampled the rights of citizens,” he said.

“Bank of America took over the bankrupt Countrywide Home Loan portfolio June 3, 2009 in a stock deal that has over 1100 home owners in foreclosure in Utah this month alone, and the numbers keep growing,” Barlow said.

The second part of the motion, Barlow filed, claims that neither the lender, nor MERS*, nor Bank of America, nor any other Defendant, has any remaining interest in the mortgage Promissory Note. The note has been bundled with other notes and sold as mortgage-backed securities or otherwise assigned and split from the Trust Deed. When the note is split from the trust deed, “the note becomes, as a practical matter, unsecured.” Restatement (Third) of Property (Mortgages) § 5.4 cmt. a (1997). A person or entity only holding the trust deed suffers no default because only the Note holder is entitled to payment. Basically, “[t]he security is worthless in the hands of anyone except a person who has the right to enforce the obligation; it cannot be foreclosed or otherwise enforced.” Real Estate Finance Law (Fourth) § 5.27 (2002).

*MERS is a process that is designed to simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans. http://www.mersinc.org

2. MERS’s Authority to Operate in California
The FAC fleetingly alleges that “MERS [is] not registered to do
business in California.” FAC ¶ 9. While MERS’s registration
status receives no other mention in the complaint, plaintiff’s
opposition memorandum purports to support several of plaintiff’s
claims with this allegation, and defendant’s reply discusses it
on the merits. The court therefore discusses this issue here.
The California Corporations Code requires entities that
“transact[] intrastate business” in California to acquire a
“certificate of qualification” from the California Secretary of
State. Cal. Corp. Code § 2105(a). MERS argues that its activities
fall within exceptions to the statutory definition of transacting
intrastate business, such that these requirement does not apply.
See Cal. Corp. Code § 191. It is not clear to the court that
MERS’s activity is exempt.
Page 23
MERS primarily relies on Cal. Corp. Code § 191(d)(3). Cal.
Corp. Code § 191(d) enumerates various actions that do not
trigger the registration requirement when performed by “any
foreign lending institution.” Because neither the FAC nor the
exhibits indicate that MERS is such an institution, MERS cannot
protect itself under this exemption at this stage. The statute
defines “foreign lending institution” as “including, but not
limited to: [i] any foreign banking corporation, [ii] any foreign
corporation all of the capital stock of which is owned by one or
more foreign banking corporations, [iii] any foreign savings and
loan association, [iv] any foreign insurance company or [v] any
foreign corporation or association authorized by its charter to
invest in loans secured by real and personal property[.]” Cal.
Corp. Code § 191(d). Neither any published California decision
nor any federal decision has interpreted these terms. Because
plaintiff alleges that MERS does not itself invest in loans or
lend money, it appears that [i], [iii], and [v] do not apply.
MERS does not claim to be an insurance company under [ii].
Finally, it is certainly plausible that not all of MERS’s owners
are foreign corporations. At this stage of litigation, the court
cannot conclude that MERS falls within any of the five enumerated
examples of “foreign lending institutions,” and the court
declines to address sua sponte whether MERS otherwise satisfies
subsection (d).
Corp. Code § 191(d). Neither any published California decision
nor any federal decision has interpreted these terms. Because
plaintiff alleges that MERS does not itself invest in loans or
lend money, it appears that [i], [iii], and [v] do not apply.
MERS does not claim to be an insurance company under [ii].
Finally, it is certainly plausible that not all of MERS’s owners
are foreign corporations. At this stage of litigation, the court
cannot conclude that MERS falls within any of the five enumerated
examples of “foreign lending institutions,” and the court
declines to address sua sponte whether MERS otherwise satisfies
subsection (d).
Defendants also invoke a second exemption, Cal. Corp. Code
§ 191(c)(7). While section 191(c) is not restricted to “lending
institutions,” MERS’s acts do not fall into the categories
Page 24
enumerated under the section, including subsection (c)(7).
Plaintiff alleges that MERS directed the trustee to initiate
nonjudicial
foreclosure on the property. Section 191(c)(7)
provides that “[c]reating evidences of debt or mortgages, liens
or security interests on real or personal property” is not
intrastate business activity. Although this language is
unexplained, directing the trustee to initiate foreclosure
proceedings appears to be more than merely creating evidence of a
mortgage. This is supported by the fact that a separate statutory
section, § 191(d)(3) (which MERS cannot invoke at this time, see
supra), exempts “the enforcement of any loans by trustee’s sale,
judicial process or deed in lieu of foreclosure or otherwise.”
Interpreting section (c)(7) to include these activities would
render (d)(3) surplusage, and such interpretations of California
statutes are disfavored under California law. People v. Arias,
45 Cal. 4th 169, 180 (2008), Hughes v. Bd. of Architectural
Examiners, 17 Cal. 4th 763, 775 (1998). Accordingly,
section 191(c)(7) does not exempt MERS’s activity.[fn12]
For these reasons, plaintiff’s argument that MERS has acted
Page 25
in violation of Cal. Corp. Code § 2105(a) is plausible, and
cannot be rejected at this stage in the litigation.
3. Whether MERS Has Acted UltraVires
Plaintiff separately argues that MERS has acted in violation of
its own “terms and conditions.” These “terms” allegedly provide
that
MERS shall serve as mortgagee of record with respect to
all such mortgage loans solely as a nominee, in an
administrative capacity, for the beneficial owner or
owners thereof from time to time. MERS shall have no
rights whatsoever to any payments made on account of
such mortgage loans, to any servicing rights related to
such mortgage loans, or to any mortgaged properties
securing such mortgage loans. MERS agrees not to assert
any rights (other than rights specified in the
Governing Documents) with respect to such mortgage
loans or mortgaged properties. References herein to
“mortgage(s)” and “mortgagee of record” shall include
deed(s) of trust and beneficiary under a deed of trust
and any other form of security instrument under
applicable state law.”
FAC ¶ 10. The FAC does not specify the source of these “terms and
conditions.” Plaintiff’s opposition memorandum states that they
are taken from MERS’s corporate charter, implying that an action
in violation thereof would be ultra vires. Opp’n at 4. Plaintiff
then alleges that these terms do not permit MERS to “act as a
nominee or beneficiary of any of the Defendants.” FAC ¶ 32.
However, the terms explicitly permit MERS to act as nominee.
Plaintiff has not alleged a violation of these terms.
4. Defendants’ Authority to Foreclose
Another theme underlying many of plaintiff’s claims is that
defendants have attempted to foreclose or are foreclosing on the
Page 26
property without satisfying the requirements for doing so.
Plaintiff argues that foreclosure is barred because no defendant
is a person entitled to enforce the deed of trust under the
California Commercial Code and because defendants failed to issue
a renewed notice of default after the initial trustee’s sale was
4. Defendants’ Authority to Foreclose
Another theme underlying many of plaintiff’s claims is that
defendants have attempted to foreclose or are foreclosing on the
Page 26
property without satisfying the requirements for doing so.
Plaintiff argues that foreclosure is barred because no defendant
is a person entitled to enforce the deed of trust under the
California Commercial Code and because defendants failed to issue
a renewed notice of default after the initial trustee’s sale was
rescinded.

As a homeowner begins research into the lending and foreclosure crisis, there will be many unfamiliar terms, names and companies that come to their attention. Chief among these will be MERS.

MERS is the acronym for Mortgage Electronic Registration Systems. It is a national electronic registration and tracking system that tracks the beneficial ownership interests and servicing rights in mortgage loans. The MERS website says:

“MERS is an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans. “

In simple language, MERS is an on-line computer software program for tracking ownership.

MERS was conceived in the early 1990’s by numerous lenders and other entities. Chief among the entities were Bank of America, , Fannie Mae, Freddie Mac, and a host of other such entities. The stated purpose was that the creation of MERS would lead to “consumers paying less” for mortgage loans. Obviously, that did not happen.

This article will attempt to explain MERS in very general detail. It will cover a few issues related to MERS and foreclosure, in order to introduce the reader to the issue of MERS. It is not meant to be a complete discussion of MERS, nor of the legal complexities regarding the arguments for and against MERS. For a more in depth reading of MERS and findings coming out of courts, it is recommended that the reader look at Hawkins, Case No. BK-S-07-13593-LBR (Bankr. Nev. 3/31/2009) (Bankr. Nev., 2009) . It gives a good reading of the issues related to MERS, at least for that particular case. Though in Nevada, it is relevant for California.

(Please note. I am not an attorney and am not giving legal advice. I am just reporting arguments being made against MERS, and also certain case law and applicable statutes in California.

The MERS Process

Traditionally, when a loan was executed, the beneficiary of the loan on the Deed of Trust was the lender. Once the loan was funded, the Deed of Trust and the Note would be recorded with the local County Recorder’s office. The recording of the Deed and the Note created a Public Record of the transaction. All future Assignments of the Note and Deed of Trust were expected to be recorded as ownership changes occurred. The recording of the Assignments created a “Perfected Chain of Title” of ownership of the Note and the Deed of Trust. This allowed interested or affected parties to be able to view the lien holders and if necessary, be able to contact the parties. The recording of the document also set the “priority” of the lien. The priority of the lien would be dependent upon the date that the recording took place. For example, a lien recorded on Jan 1, 2007 for $20,000 would be the first mortgage, and a lien recorded on Jan 2, 2007, for $1,500,000 would be a second mortgage, even though it was a higher amount.

Recordings of the document also determined who had the “beneficial interest” in the Note. An interested party simple looked at the Assignments, and knew who held the Note and who was the legal party of beneficial interest.

(For traditional lending prior to Securitization, the original Deed recording was usually the only recorded document in the Chain of Title. That is because banks kept the loans, and did not sell the loan, hence, only the original recording being present in the banks name.

The advent of Securitization, especially through “Private Investors” and not Fannie Mae or Freddie Mac, involved an entirely new process in mortgage lending. With Securitization, the Notes and Deeds were sold once, twice, three times or more. Using the traditional model would involve recording new Assignments of the Deed and Note as each transfer of the Note or Deed of Trust occurred. Obviously, this required time and money for each recording.

(The selling or transferring of the Note is not to be confused with the selling of Servicing Rights, which is simply the right to collect payments on the Note, and keep a small portion of the payment for Servicing Fees. Usually, when a homeowner states that their loan was sold, they are referring to Servicing Rights.)

The creation of MERS changed the process. Instead of the lender being the Beneficiary on the Deed of Trust, MERS was now named as either the “Beneficiary” or the “Nominee for the Beneficiary” on the Deed of Trust. This meant that MERS was simply acting as an Agent for the true beneficiary. The concept was that with MERS assuming this role, there would be no need for Assignments of the Deed of Trust, since MERS would be given the “power of sale” through the Deed of Trust.

Black’s Law Dictionary defines a nominee as “[a] person designated to act in place of another, usually in a very limited way” and as “[a] party who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others.” Black’s Law Dictionary 1076 (8th ed. 2004). This definition suggests that a nominee possesses few or no legally enforceable rights beyond those of a principal whom the nominee serves……..The legal status of a nominee, then, depends on the context of the relationship of the nominee to its principal. Various courts have interpreted the relationship of MERS and the lender as an agency relationship.

The naming of MERS as the Beneficiary meant that certain other procedures had to change. This was a result of the Note actually being made out to the lender, and not to MERS. Before explaining this change, it would be wise to explain the Securitization process.

Securitizing a Loan

Securitizing a loan is the process of selling a loan to Wall Street and private investors. It is a method with many issues to be considered, especially tax issues, which is beyond the purview of this article. The methodology of securitizing a loan generally followed these steps:

· A Wall Street firm would approach other entities about issuing a “Series of Bonds” for sell to investors and would come to an agreement. In other words, the Wall Street firm “pre-sold” the bonds.

· The Wall Street firm would approach a lender and usually offer them a Warehouse Line of Credit. The Warehouse Credit Line would be used to fund the loans. The Warehouse Line would be covered by restrictions resulting from the initial Pooling & Servicing Agreement Guidelines and the Mortgage Loan Purchase Agreement. These documents outlined the procedures for creation of the loans and the administering of the loans prior to, and after, the sale of the loans to Wall Street.

· The Lender, with the guidelines, essentially went out and found “buyers” for the loans, people who fit the general characteristics of the Purchase Agreement,. (Guidelines were very general and most people could qualify.” The Lender would execute the loan and fund it, collecting payments until there were enough loans funded to sell to the Wall Street firm who could then issue the bonds.

· Once the necessary loans were funded, the lender would then sell the loans to the “Sponsor”, usually either a subsidiary of the Wall Street firm, of a specially created Corporation of the lender. At this point, the loans are separated into “tranches” of loans, where they will be eventually turned into bonds.

Next, the loans were “sold” to the “Depositor”. This was a “Special Purpose Vehicle” designed with one purpose in mind. That was to create a “bankruptcy remote vehicle” where the lender or other entities are protected from what might happen to the loans, and/or the loans are “protected” from the lender. The “Depositor” would have once again been created by the Wall Street firm or the Lender.

Then, the “Depositor” places the loans into the Issuing Entity, which is another created entity solely used for the purpose of selling the bonds.

Finally, the bonds would be sold, with a Trustee appointed to ensure that the bondholders received their monthly payments.

As can be seen, each Securitized Loan has had the ownership of the Note transferred two to three times at a minimum, but, no Assignments of Beneficiary are executed under most circumstances. If such an Assignment occurs, it will usually occur after a Notice of Default was filed.

(Note: This is a VERY simplified version of the process, but it gives the general idea. Depending upon the lender, it could change to some degree, especially if Fannie Mae bought the loans. The purpose of such a convoluted process was so that the entities selling the bonds could become a “bankruptcy remote” vehicle, protecting lenders and Wall Street from harm, and also creating a “Tax Favorable” investment entity known as an REIMC. An explanation of this process would be cumbersome at this time.)

New Procedures

As mentioned previously, Securitization and MERS required many changes in established practices. These practices were not and have not been codified, so they are major points of contention today. I will only cover a few important issues which are now being fought out in the courts.

One of the first issues to be addressed was how MERS might foreclose on a property. This was “solved” through an “unusual” practice.

· MERS has only 44 employees. They are all “overhead”, administrative or legal personnel. How could they handle the load of foreclosures, Assignments, etc to be expected of a company with their duties and obligations?

When a lender, title company, foreclosure company or other firm signed up to become a member of MERS, one or more of their people were designated as “Corporate Officers” of MERS and given the title of either Assistant Secretary or Vice President. These personnel were not employed by MERS, nor received income from MERS. They were named “Certify Officers” solely for the purpose of signing foreclosure and other legal documents in the name of MERS. (Apparently, there are some agreements which “authorize” these people to act in an Agency manner for MERS.)

This “solved” the issue of not having enough personnel to conduct necessary actions. It would be the Servicers, Trustees and Title Companies conducting the day-to-day operations needed for MERS to function.

As well, it was thought that this would provide MERS and their “Corporate Officers” with the “legal standing” to foreclose.

However, this brought up another issue that now needed addressing:

* When a Note is transferred, it must be endorsed and signed, in the manner of a person signing his paycheck over to another party. Customary procedure was to endorse it as “Pay to the Order of” and the name of the party taking the Note and then signed by the endorsing party. With a new party holding the Note, there would now need to be an Assignment of the Deed. This could not work if MERS was to be the foreclosing party.

Once a name is placed into the endorsement of the Note, then that person has the beneficial interest in the Note. Any attempt by MERS to foreclose in the MERS name would result in a challenge to the foreclosure since the Note was owned by “ABC” and MERS was the “Beneficiary”. MERS would not have the legal standing to foreclose, since only the “person of interest” would have such authority. So, it was decided that the Note would be endorsed “in blank”, which effectively made the Note a “Bearer Bond”, and anyone holding the Note would have the “legal standing” to enforce the Note under Uniform Commercial Code. This would also suggest to the lenders that Assignments would not be necessary.

MERS has recognized the Note Endorsement problem and on their website, stated that they could be the foreclosing party only if the Note was endorsed in blank. If it was endorsed to another party, then that party would be the foreclosing party.

As a result, most Notes are endorsed in blank, which purportedly allows MERS to be the foreclosing party. However, CA Civil Code 2932.5 has a completely different say in the matter. It requires that the Assignment of the Deed to the Beneficial Interest Holder of the Note.

CA Civil Code 2932.5 – Assignment

Where a power to sell real property is given to a mortgagee, or other encumbrancer, in an instrument intended to secure the payment of money, the power is part of the security and vests in any person who by assignment becomes entitled to payment of the money secured by the instrument. The power of sale may be exercised by the assignee if the assignment is duly acknowledged and recorded.

As is readily apparent, the above statute would suggest that Assignment of the Deed to the Note Holder is a requirement for enforcing foreclosure.

The question now becomes as to whether a Note Endorsed in Blank and transferred to different entities as indicated previously does allow for foreclosure. If MERS is the foreclosing authority but has no entitlement to payment of the money, how could they foreclose? This is especially important if the true beneficiary is not known. Why do I raise the question of who the true beneficiary is? Again, from the MERS website……..

* “On MERS loans, MERS will show as the beneficiary of record. Foreclosures should be commenced in the name of MERS. To effectuate this process, MERS has allowed each servicer to choose a select number of its own employees to act as officers for MERS. Through this process, appropriate documents may be executed at the servicer’s site on behalf of MERS by the same servicing employee that signs foreclosure documents for non-MERS loans.

Until the time of sale, the foreclosure is handled in same manner as non-MERS foreclosures. At the time of sale, if the property reverts, the Trustee’s Deed Upon Sale will follow a different procedure. Since MERS acts as nominee for the true beneficiary, it is important that the Trustee’s Deed Upon Sale be made in the name of the true beneficiary and not MERS. Your title company or MERS officer can easily determine the true beneficiary. Title companies have indicated that they will insure subsequent title when these procedures are followed.”

There, you have it. Direct from the MERS website. They admit that they name people to sign documents in the name of MERS. Often, these are Title Company employees or others that have no knowledge of the actual loan and whether it is in default or not.

Even worse, MERS admits that they are not the true beneficiary of the loan. In fact, it is likely that MERS has no knowledge of the true beneficiary of the loan for whom they are representing in an “Agency” relationship. They admit to this when they say “Your title company or MERS officer can easily determine the true beneficiary.

To further reinforce that MERS is not the true beneficiary of the loan, one need only look at the following Nevada Bankruptcy case, Hawkins, Case No. BK-S-07-13593-LBR (Bankr.Nev. 3/31/2009) (Bankr.Nev., 2009) – ”A “beneficiary” is defined as “one designated to benefit from an appointment, disposition, or assignment . . . or to receive something as a result of a legal arrangement or instrument.” BLACK’S LAW DICTIONARY 165 (8th ed. 2004). But it is obvious from the MERS’ “Terms and Conditions” that MERS is not a beneficiary as it has no rights whatsoever to any payments, to any servicing rights, or to any of the properties secured by the loans. To reverse an old adage, if it doesn’t walk like a duck, talk like a duck, and quack like a duck, then it’s not a duck.”

If one accepts the above ruling, which MERS does not agree with, MERS would not have the ability to foreclose on a property for lack of being a true Beneficiary. This leads us back to the MERS as “Nominee for the Beneficiary” and foreclosing as Agent for the Beneficiary. There may be pitfalls with this argument.

When the initial Deed of Trust is made out in the name of MERS as Nominee for the Beneficiary and the Note is made to ABC Lender, there should be no issues with MERS acting as an Agent for ABC Lender. Hawkins even recognizes this as fact.

The issue does arise when the Note transfers possession. Though the Deed of Trust states “beneficiary and/or successors”, the question can arise as to who the successor is, and whether Agency is any longer in effect. MERS makes the argument that the successor Beneficiary is a MERS member and therefore Agency is still effective. But does this argument hold up under scrutiny?

The original Note Holder, AB Lender, no longer holds the note, nor is entitled to payment.

Furthermore, the Note is endorsed in blank, and no Assignment of the Deed has been made to any other entity, so who is the true beneficiary and Note Holder?

It is now the contention of many that the Agency/Nominee relationship has been completely terminated between MERS and the original lender, so MERS has no authority to foreclose, or even to Assign the Deed.

In Vargas, 396 B.R. 511, 517 (Bankr. C.D. Cal. 2008) (”[I]f FHM has transferred the note, MERS is no longer an authorized agent of the holder unless it has a separate agency contract with the new undisclosed principal. MERS presents no evidence as to who owns the note, or of any authorization to act on behalf of the present owner.”);

Saxon Mortgage Services, Inc. v. Hillery, 2008 WL 5170180 (N.D. Cal. 2008) (unpublished opinion) (”[F]or there to be a valid assignment, there must be more than just assignment of the deed alone; the note must also be assigned. . . . MERS purportedly assigned both the deed of trust and the promissory note. . . . However, there is no evidence of record that establishes that MERS either held the promissory note or was given the authority . . . to assign the note.”).

Separation of the Note and the Deed

In the case of MERS, the Note and the Deed of Trust are held by separate entities. This can pose a unique problem dependent upon the court. There are many court rulings based upon the following:

“The Deed of Trust is a mere incident of the debt it secures and an assignment of the debt carries with it the security instrument. Therefore, a Deed Of Trust is inseparable from the debt and always abides with the debt. It has no market or ascertainable value apart from the obligation it secures.

A Deed of Trust has no assignable quality independent of the debt, it may not be assigned or transferred apart from the debt, and an attempt to assign the Deed Of Trust without a transfer of the debt is without effect. “

This very “simple” statement poses major issues. To easily understand, if the Deed of Trust and the Note are not together with the same entity, then there can be no enforcement of the Note. The Deed of Trust enforces the Note. It provides the capability for the lender to foreclose on a property. If the Deed is separate from the Note, then enforcement, i.e. foreclosure cannot occur.

MERS, actually the servicer, will Assign the Deed to the Note Holder, almost always after the Notice of Default has been filed. This will be an attempt to reunite the Deed and Note. But, as noted previously, MERS would likely no longer have the ability to Assign the Deed, since the Agency/Nominee status has been terminated. This could pose major issues, especially if the original lender is no longer in business.

When viewing a MERS loan, the examiner or attorney must pay careful attention to the following issues.

* The recorded history of the Deed to determine not just the current Deed Holder, but also who the Note Holder is. Are they one and the same, or are they separated, leading to an inability to foreclose unless reunited.

* When the Notice of Default was filed, were the Note and Deed separated, which would suggest that the Notice of Default was potentially unlawful.

* Did MERS have the authority to Foreclose, or even to make Assignments? There are a number of court cases suggesting otherwise.

* Who is signing for MERS? Is it a person with the Title Company, Trustee, or Servicer?

* Does the signer have legitimate authority to sign? Is the person holding factual knowledge of the homeowner being in default?

The entire subject of MERS is fraught with controversy and questions. Certainly, at the very least, MERS actions pose legal issues that are still being addressed each and every day. As to where these actions will ultimate lead, it is anybody’s guess. With some courts, the court sides with the lender, and others side with the homeowner. However, there does appear to be a trend developing that suggests, at least in Bankruptcy Courts, MERS is losing support.

Update:

I would like to point out that there is significant case law developing in other states regarding MERS. However, these are actions in other jurisdictions that do not necessarily apply in California. As a matter of fact, these arguments are generally not being accepted by most judges.
Currently, the state of California litigation is confused to say the least. Most judges are accepting the the California Foreclosure Statutes, Civil Code 2924, is all encompassing with regards to foreclosures. But 2924 only covers the procedural process. It does not take into account other relevant statutes related to Assignments of Beneficiary and Substitution of Trustee. Until such concerns are addressed and there is effective case law to cite, there will continue to be issues.

This document is meant to take the reader down a road they have
likely never traveled. This is a layman’s explanation of what has
been happening in this country that most have no idea or inkling
of. It is intended to give the reader an overview of a systemic
Fraud in this country that has reached epic proportions and
provoke action to eradicate this scourge that has descended upon
the people of America. This is intended as an overview of the process. Is
is one thing to have a grasp on what actually happened in our capitalistic
society it is quit another to convince a judge on these facts. The Judge
has his or her hands tied by the very system that allowed the
fraud in the first place.
Depending on what your situation is, you
may react with disbelief, fear, anger or outright disgust at what you
are about to learn. The following information is supported with
facts, exhibits, law and is not mere opinion.

Let’s start our journey of discovery with the purchase of a home
and subsequent steps in the financial process through the life of
the “mortgage loan”. It all starts at the “closing” where we gather
with other people that are “involved” in the process to sign the
documents to purchase our new home. Do we really know what
goes on at the closing? Are we ever told who all the participants
are in that entire process? Are we truly given “full disclosure” of all
the various aspects of that entire transaction regarding what, for
most people, is the single largest purchase they will make in their
entire life?

Let’s start with the very first part of the transaction. We have a
virtual stack of papers placed in front of us and we are instructed
where we are supposed to start signing or initialing on those
“closing documents”. There seems to be so many different
documents with enough legal language that we could read for
hours just to get through them the first time, much less begin to
fully understand them. Are we given a copy of all these documents
at least 7 days prior to the closing so we can read and study these
documents so we fully understand what it is that we are signing
and agreeing to? That has never happened for the average
consumer and purchaser of a property in the last 30 years or more
if it ever has at all. WHY? We have a stack of documents placed
before us at the “closing” that we haven’t ever seen before and are
instructed where to sign or initial to complete the transaction and
“get our new home”. We depend on the real estate agent, in most
cases, to bring the parties together at the closing after we have
supplied enough financial data and other requested information so
that the “lender” can determine whether we can qualify for our
“loan”. Obviously we have the “three day right of rescission” but do
we really stop to read all the documents after we have just
purchased our home and want to move in? Is the thought that
there might be something wrong with what we have just signed a
primary thought in our mind at that time? Did we trust the people
involved in the transaction? Are we naturally focusing on getting
moved into our new home and getting settled with our family?

Who are the players involved in the transaction from the
perspective of the consumer purchasing a property and signing a
“Mortgage Note” and “Deed” or similar “Security Instrument” at the
closing? There is, of course, the seller, the real estate agent(s), title
insurance company, property appraiser who is supposed to
properly determine the value of the property, and the most
obvious one being who we believe to be “the lender” in the
transaction. We are led, by all involved, to believe that we are, in
fact, borrowing money from the “lender” which is then paid to the
current owner of the property as compensation for them
relinquishing any “claim of ownership” to the property and
transferring that “claim of ownership” to us as the purchaser. It all
seems so simple and clear on its face and then the transaction is
completed. After the “closing” everyone is all smiles and you
believe you have a new home and have to repay the “lender”, over a
period of years, the money which you believe you have “borrowed”.

IS THERE SOMETHING WE DON’T KNOW?

Everything appears to be relatively simple and straightforward
but is that really the case? Could it be that there are other players
involved in this whole transaction that we know nothing about that
have a very substantial financial interest in what has just
occurred? Could it be that those players that we are totally
unaware of have somehow used us without our knowledge or

consent to secure a spectacular financial gain for themselves with
absolutely no investment or risk to themselves whatsoever? Could
it be that there is a hidden aspect of this whole transaction that is
“standard operating procedure” in an industry where this hidden
“aspect of a transaction” occurs every single banking day across
this country and beyond? Could it be that this hidden “aspect of a
transaction” is a deliberate process to unjustly enrich certain
individuals and entities at the expense of the public as a whole?
Could it be that there was not full disclosure of the “true nature” of
the transaction as it actually occurred which is required for a
contract to be valid and enforceable?

THE DOCUMENTS INVOLVED

The two most important and valuable documents that are signed
at a closing are the “Note” and the “Deed” in various forms. When
looking at the definition of a “Mortgage Note” it is obvious that it is
a “Security Instrument”. It is a promise to pay made by the maker
of that “Note”. When looking at a copy of a “Deed of Trust” such as
the attached Exhibit “A”, which is a template of a Tennessee “Deed
of Trust” form that is directly from the freddiemac.com website, it
is very obvious that this document is also a “Security Instrument”.
This is a template that is used for MOST government purchased
loans. You will note that the words “Security Instrument” are
mentioned no less than 90 times in that document. Is there ANY
doubt it is a “Security”? When at the closing, the “borrower” is led

to believe that the “Mortgage Note” that he signs is a document that
binds him to make repayment of “money” that the “lender” is
loaning him to purchase the property he is acquiring. Is there
disclosure to the “borrower” to the effect that the “lender” is not
really loaning any of their money to the “borrower” and therefore
is taking no risk whatsoever in the transaction? Is it disclosed to
the “borrower” that according to FEDERAL LAW, banks are not
allowed to loan credit and are also not allowed to loan their own or
their depositor’s money? If that is the case, then how could this
transaction possibly take place? Where does the money come
from? Is there really any money to be loaned? The answer to this
last question is a resounding NO! Most people are not aware that
there has been no lawful money since the bankruptcy of the United
States in 1933.

Since House Joint Resolution 192 (HJR 192) (Public law 7310)
was passed in 1933 we have only had debt, because all property
and gold was seized by the government as collateral in the
bankruptcy of the United States. Most people today would think
they have money in their hand when they pull something out of
their pocket and look at the paper that is circulated by the banks
that they have been told is “money”. In reality they are looking at a
“Federal Reserve Note” which is stated right on the face of the piece
of paper we have come to know as “money”. It is NOT really
“money”, it is debt, a promise to pay made by the United States! If
you take a “Federal Reserve Note” showing a value of ten dollars

and buy something, you are then making a purchase with a “Note”
(a promise to pay). There is absolutely no gold or silver backing
the Federal Reserve Notes that we refer to as “money” today.

When you sit down at the closing table to complete the
transaction to purchase your home aren’t you tendering a “Note”
with your signature which would be considered money? That is
exactly what you are doing. A “Note” is money in our monetary
system today! You can deposit the “Federal Reserve Note” (a
promise to pay) with a denomination of $10 at the bank and they
will credit your account in that same amount. Why is it that when
you tender your “Note” at the closing that they don’t tell you that
your home is paid for right on the spot? The fact is that it IS PAID
FOR ON THE SPOT. Your signature on a “Note” makes that “Note”
money in the amount that is stated on the “Note”! Was this
disclosed to you at the “closing” in either verbal or written form?
Could this be the place where the other players come into the
transaction at or near the time of closing? What happens to the
“Note” (promise to pay) that you sign at the closing table? Do they
put it in their vault for safe keeping as evidence of a debt that you
owe them as you are led to believe? Do they return that note to you
if you pay off your mortgage in 5, 10 or 20 years? Do they disclose
to you that they do anything other than put it away for safe keeping
once it is in their possession?

WHAT ACTUALLY HAPPENS TO THE “NOTE”?

Unknown to almost everyone, there is something VERY different
that happens with your “Mortgage Note” immediately after closing.

Your “Mortgage Note” is endorsed and deposited in the bank as a
check and becomes “MONEY”! See attached (Exhibit “B” para 13)
The document that you just gave the bank with your signature on
it, that you believe is a promise to pay them for money loaned to
you, has just been converted to money in THEIR ACCOUNT. You
just gave the “lender” the exact dollar value of what they said they
just loaned you! Who is the REAL creditor in this “Closing
Transaction”? Who really loaned who anything of value or any
money? You actually just paid for your own home with your
promissory “Mortgage Note” that you gave the bank and the bank
gave you what in return? NOTHING!!! For any contract to be valid
there must be consideration given by both parties. But don’t they
tell you that you must now pay back the “Loan” that they have
made to you?

How can it be that you could just write a “Note” and pay for your
home? This leads us back to the bankruptcy of the United States in
1933. When FDR and Congress took all the property and gold from
the people in 1933 they had to give something in return for that
confiscation of property. See attached (Exhibit “B” para 6) What
the people got in return was the promise that all of their needs
would be met by the government because the assets and the labor
of the people were collateral for the debt of the United States in the

bankruptcy. All of their debts would be “discharged”. This was
done without the consent of the people of America and was an act
of Treason by President Franklin Delano Roosevelt. The problem
comes in where they never told us how we could accomplish that
discharge and have what we were entitled to after the bankruptcy.
Why has this never been taught in the schools in this country?
Could it be that it would expose the biggest fraud in the history of
this entire country and in the world? If the public is purposely not
educated about certain things then certain individuals and entities
can take full financial advantage of virtually the entire population.
Isn’t this “selective education” more like “indoctrination”? Could
this be what has happened? In Fina Supply, Inc. v. Abilene Nat.
Bank, 726 S.W.2d 537, 1987 it says “Party having superior
knowledge who takes advantage of another’s ignorance of the law
to deceive him by studied concealment or misrepresentation can
be held responsible for that conduct.” Does this mean that if there
are people with superior knowledge as a party in this “Loan
Transaction” that take advantage of the “ignorance of the law”,
(through indoctrination) of the public to unjustly enrich
themselves, that they can be held responsible? Can they be held
responsible in only a civil manner or is there a more serious
accountability that falls into the category of criminal conduct?

It is well established law that Fraud vitiates (makes void) any
contract that arises from it. Does this mean that this intentional
“lack of disclosure” of the true nature of the contract we have

entered into is Fraud and would make the mortgage contract void
on its face? Could it be that the Fraud could actually be “studied
concealment or misrepresentation” that makes those involved in
the act responsible and accountable? What happens to the “Note”
once it is deposited in the bank and is converted to “money”? Are
there different kinds of money? There is money of exchange and
money of account. They are two very different things. See attached
(Exhibit “B” para 11), Affidavit of Expert Witness Walker Todd.
Walker Todd explains in his expert witness affidavit that the banks
actually do convert signatures into money. The definition of
“money” according to the Uniform Commercial Code: “Money” means a
medium of exchange authorized or adopted by a domestic or foreign
government and includes a monetary unit of account established by an
intergovernmental organization or by agreement between two or more nations. Money can actually be in different forms other than what we are
accustomed to thinking. When you sign your name on a
promissory note it becomes money whether you are talking a
mortgage note or a credit card application! Did the bankers ever
“disclose” this to us? Were we ever taught anything about this in
the school system in this country? Could it be that this whole idea
of being able to convert our signature to money is a “studied
concealment” or “misrepresentation” where those involved
become responsible if we are harmed by their actions? What
happens if you have signed a “Mortgage Note” and already paid for
your home and they come at a later date and foreclose and take it
from you? Would you consider yourself to be harmed in any way?
We will bring this up again very shortly but we need to look at the

other document that is signed at the “closing” that is of great
significance.

THE DEED OF TRUST

Why do we need a Deed of Trust? What exactly IS a Deed of
Trust or other similar “Security Instrument”? It spells out all the
details of the contract that you are signing at the “closing”,
including such things as insurance requirements, preservation and
maintenance and all of the financial details of how, when, where
and why you are going to make payments to the “lender” for years
and years. Wait a minute!!!!! Make payments to the “lender”????
Why do you have to make payments to the “lender”??? Didn’t we
just establish the fact that your house was paid for by YOU, with
your “Mortgage Note” that is converted to money by THE BANK
DEPOSITING IT? Is there something wrong with this picture? We
have just paid for our “home” but now we are told we have to sign a
Deed of Trust or similar “Security Instrument” that binds us to pay
the “lender” back? Pay the “lender” back for what? Did they loan
us any money? Remember the part about banks not being able to
loan “their or their depositors money” under FEDERAL LAW? What
about: “In the federal courts, it is well established that a national bank
has no power to lend its credit to another by becoming surety, indorser,
or guarantor for him.” Farmers and Miners Bank v. Bluefield Nat ‘l
Bank, 11 F 2d 83, 271 U.S. 669; “A national bank has no power to lend
its credit to any person or corporation.” Bowen v. Needles Nat. Bank, 94

What is happening here with this “Deed of Trust” or similar
“Security Instrument” that says we have to pay all this money back
and if we don’t, they can foreclose and take our home? Why do we
have to have this kind of agreement when we have already paid for
our home through our “Mortgage Note” which was converted to
money BY THE BANK? Could this possibly be another example of
“studied concealment or misrepresentation” where those involved
could be held accountable for their conduct? What happens to this
Deed of Trust or similar “Security Instrument” after we sign it?
Where does it go? Does it go into the vault for safekeeping like we
might think? See attached Exhibit “C” for substantially more
information.

WHO ARE THE OTHER PLAYERS?

We have already found out that the “Note” doesn’t go into the vault
for safe keeping but instead is deposited into an account at the
bank and becomes money. Where does the Note go then? This is
where things get VERY interesting because your “Mortgage Note” is
then used to access your Treasury Account (that you know nothing
about) and get credit in the amount of your “Mortgage Note” from
your “Prepaid Treasury Account”. If they process the “Note” and
get paid for it then they have received the funds from YOUR

account at Treasury to pay for YOUR home correct? They then turn
around and bundle the “Note” and sell it to investors on Wall Street
and get paid again! Now let’s see what happens to the “Deed of
Trust” or similar “Security Instrument” after you have signed it.
You may be quite surprised to know that not only does it not go
into “safekeeping” it is immediately SOLD as an INVESTMENT
SECURITY to one of any number of investors tied to Wall Street.
There is a ready, and waiting, market for all of the “mortgage
paper” that is produced by the banks. What happens is the “Deed
of Trust” or other similar “Security Instrument” is bundled and
SOLD to a buyer and the BANK GETS PAID FOR THE VALUE OF THE
MORTGAGE AGAIN!! Haven’t the bankers just transferred any risk
on that mortgage to someone else and they have their money?
That is a pretty slick way of doing things! They ALWAYS get their
money right away and everyone else connected to the transaction
has the liabilities! Is there something wrong with THIS picture?
How can it possibly be that the bank has now been paid three times
in the amount of your “purported” mortgage? How is it that you
still have to pay years and years on this “purported” loan? Was any
of this disclosed to you before you signed the “Deed of Trust” or
other similar “Security Instrument”? Would you have signed ANY
of those documents including the “Mortgage Note” if you knew that
this is what was actually happening? Do you think there were any
“copies” of the “Mortgage Note” and “Deed of Trust” or other
similar “Security Instrument” made during this process? Are those

“copies” just for the records to be put in a file somewhere or is
there another purpose for them?

CAN REPRODUCING A NOTE OR DEED OF TRUST BE
ILLEGAL?

We have already established that the “Mortgage Note” and the
“Deed of Trust” or other similar “Security Instrument” are
“Securities” by definition under the law. Securities are regulated
by the Securities and Exchange Commission which is an agency of
the Federal Government. There are very strict regulations about
what can and cannot be done with “Securities”. There are very
strict regulations that apply to the reproduction or “copying” of
“Securities”:

The Counterfeit Detection Act of 1992, Public Law 102-550, in Section 411 of Title 31 of the Code of Federal Regulations, permits color illustr

ations of U.S. currency provided: . The illustration is of a size less than three-fourths or more than one and one-ch part of the item illustrated

half, in linear dimension, of ea

. The illustration is one-sided All negatives, plates, positives, digitized storage medium, graphic files, magnetic medium, optical storage devices, and any other thing used in the making of the illustration that contain an image of the illustration or any part thereof are destroyed and/or deleted or erased after their final use

Other

Obligations and Securities
. Photographic or other likenesses of other United States obligations and securities and foreign currencies are permissible for any non-fraudulent purpose, provided the items are reproduced in black and white and are less

than three-quarters or greater than one-and-one-half times the size, in linear dimension, of any part of the original item being reproduced. Negatives and plates used in making the likenesses must be destroyed after their use for the purpose for which they were made.

Title 18 USC § 472 Uttering counterfeit obligations or securities
Whoever, with intent to defraud, passes, utters, publishes, or sells, or attempts to pass, utter, publish, or sell, or with like intent brings into the United States or keeps in possession or conceals any falsely made, forged, counterfeited, or altered obligation or other security of the United States, shall be fined under this title or imprisoned not more than 20 years, or both.

Title 18 USC § 473 Dealing in counterfeit obligations or securities Whoever buys, sells, exchanges, transfers, receives, or delivers any false, forged, counterfeited, or altered obligation or other security of the United States, with the intent that the same be passed, published, or used as true and genuine, shall be fined under this title or imprisoned not more than 20 years, or both.

Title 18 USC § 474 Plates, stones, or analog, digital, or electronic

images for counterfeiting obligations or securities Whoever, with intent to defraud, makes, executes, acquires, scans, captures, records, receives, transmits, reproduces, sells, or has in such person’s control, custody, or ossession, an analog, digital, or electronic image of any obligation or other security f the United States is guilty of a class B felony.

p

o

Are these regulations always adhered to by the “lender” when
they have possession of these “original” SECURITIES and make
reproductions of them before they are “sold to investors? How
much has been in the media in the past 2 years about people
demanding to see the “wet ink signature Note” when there is a
foreclosure action initiated against them? You hear it all the time.
Why is that such a big issue? Shouldn’t the “lender” be able to just
bring the “Note” and the “Deed of Trust” or similar “Security
Instrument” to the Court and show that they have the original

documents and are the “holder in due course” and therefore have a
legal right to foreclose? To foreclose they must have BOTH the
“Mortgage Note” and “Deed of Trust” or other similar “Security
Instrument” ORIGINAL DOCUMENTS in their possession at the time
the foreclosure action is initiated. Furthermore, IS there a real
honest to goodness obligation to be collected on?

Why is it that there is such a problem with “lost Mortgage Notes”
as is claimed by numerous lenders that are trying to foreclose
today? How could it be that there could be so many “lost”
documents all of a sudden? Could it be that the documents weren’t
really lost at all, but were actually turned into a source of revenue
that was never disclosed as being a part of the transaction? To
believe that so many “original” documents could be legitimately
“lost” in such a short period of time stretches the credibility of such
claims beyond belief. Could this be the reason that MERS (Mortage
Electronic Registration Systems) was formed in the 1990’s as a way
to supposedly “transfer ownership of a mortgage” without having
to have the “original documents” that would be required to be
presented to the various county recorders? Could it be they KNEW
THEY WOULDN’T HAVE THE ORIGINAL DOCUMENTS FOR
RECORDING and had to devise a system to get around that
requirement? When the foreclosure action is filed in the court the
attorney for the purported “party of interest”, usually the “lender”
who is foreclosing, files a “COPY” of the “Deed of Trust” or similar
“Investment Security” with the Complaint to begin foreclosure

proceedings. Is that “COPY” of the “Security Instrument” within the
“regulations” of Federal Law under 18 U.S.C. § 474? Is it usually the
same size or very nearly the same size as the original document?
Yes it is and without question it is a COUNTERFEIT SECURITY! Who
was it that produced that COUNTERFEIT SECURITY? Who was
involved in taking that COUNTERFEIT SECURITY to the Court to file
the foreclosure action? Who is it that is now legally in possession
of that COUNTERFEIT SECURITY? Has everyone from the original
“lender” down to the Clerk of the Court where the foreclosure is
now being litigated been in possession or is currently in possession
of that COUNTERFEIT SECURITY? What about the Trustees who are
involved in the process of selling foreclosed properties in nonjudicial
states? What about the fact that there is no judicial
proceeding in those states where the documentation purported to
be legal and proper to bring a foreclosure action can be verified
without expensive litigation by the alleged “borrower”? All the
trustee has to do is send a letter to the alleged “borrower” stating
they are in default and can sell their property at public auction. It
is just ASSUMED that they have the “ORIGINAL” documents in their
possession as required by law. In reality, in almost every situation,
they do NOT!!! They are using a COUNTERFEIT SECURITY as the
basis to foreclose on a property that was paid for by the person
who signed the “Mortgage Note” at the closing table that was
converted to money by the bank. When it is demanded they
produce the actual “original signed documents” they almost always
refuse to do so and ask the Court to “take their word for it” that

they have
. They have,
instead, submitted a COUNTERFEIT SECURITY to the Court as their
“proof of claim” to attempt to unjustly enrich themselves through a
blatantly fraudulent foreclosure action. One often cited example of
this was the decision handed down by U. S. Federal District Court
Judge Christopher A. Boyko of Ohio, who on October 31, 2007
dismissed 14 foreclosure actions at one time with scathing
footnote comments about the actions of the Plaintiffs and their
attorneys. See (Exhibit “E”). Not long after that came the dismissal
of 26 foreclosure cases in Ohio by U.S. District Court Judge Thomas
M. Rose who referenced the Boyko ruling in his decision. See
(Exhibit “F”). How many other judges have not been so brave as to
stand on the principles of law as Judges Boyko and Rose did, but
need to start doing so TODAY?
BOTH of the original documents which are absolutely
required to be in their possession to begin foreclosure actions.
Almost every time the people that are being foreclosed on are able
to convince the Court (in judicial foreclosures) to demand that
those “original documents” be produced in Court by the Plaintiff,
the foreclosure action stops and it is obvious why that happens!
THEY DON’T HAVE THE “ORIGINAL” DOCUMENTS

Has any of this foreclosure activity crossed state lines in
communications or other activities? Have there been at least two
predicate acts of Fraud by the parties involved? Have the people
involved used any type of electronic communication in this Fraud
such as telephone, faxing or email? It is obvious that those

questions have to be answered with a resounding YES! If that is the
case, then the Fraud that has been discussed here falls under the
RICO statutes of Federal Law. Didn’t they eventually take down the
mob for Racketeering under RICO statutes years ago? Is it time to
take down the “NEW MOB” with RICO once again?

HOW RAMPANT IS THIS FRAUD?

How could this kind of situation ever occur in this country?
Could it be that this whole entire process could be “studied
concealment or misrepresentation” where the parties involved are
responsible under the law for their conduct? Could it be that it is
no “accident” that so many “wet ink signature” Notes cannot be
produced to back up the foreclosure actions that are devastating
this country? Could it be that the overwhelming use of
COUNTERFEIT SECURITIES, as purported evidence of a debt in
foreclosure cases, is BY DESIGN and “studied concealment or
misrepresentation” so as to strip the people of this country of their
property and assets? Could it be that a VERY substantial number of
Banks, Mortgage Companies, Law Firms and Attorneys are guilty of
outright massive Fraud, not only against the people of this country,
but of massive Fraud on the Court as well because of this
COUNTERFEITING? How could one possibly come to any other
conclusion after learning the facts and understanding the law?
How many other people are implicated in this MASSIVE FRAUD
such as Trustees and Sheriffs that have sold literally millions of

homes after foreclosure proceedings based on these COUNTERFEIT
SECURITIES submitted as evidence of a purported obligation? How
many judges know about this Fraud happening right in their own
courtrooms and never did anything? How many of them have
actually been PAID for making judgments on foreclosures?
Wouldn’t that be a felony or at the very least, misprision of felony,
to know what is going on and not act to stop it or make it known to
authorities in a position to investigate and stop it?

How is it that so many banks could recover financially, so
rapidly, from the financial debacle of 200809,
with foreclosures
still running at record levels, and yet pay back taxpayer money that
was showered on them and do it so quickly? Could it be that when
they take back a property in foreclosure where they never risked
any money and actually were unjustly enriched in the previous
transaction, that it is easy to make huge sums by reselling that
property and then beginning the whole “Unconscionable” process
all over again with a new “borrower”? How is it that just three
years ago a loan was available to virtually almost anyone who
could “fog a mirror” with no documentation of income or ability to
repay a loan? Common sense makes you ask how “lenders” could
possibly take those kinds of risks. Could it be that the ability to
“repay a loan” was not an issue at all for the lenders because they
were going to get their profits immediately and risk absolutely
nothing at all? Could it be that, if anything, they stood to make
even more money if a person defaulted on the “alleged loan” in a

short period of time? They could literally obtain the property for
nothing other than some legal fees and court filing costs through
foreclosure. They could then resell the property and reap
additional unjust profits once again! One does not need to have
been a finance major in college to figure out what has been
happening once you are enlightened to the FACTS.

WHAT ACTIONS HAVE PEOPLE TAKEN TO AVOID LOSING
THEIR HOMES IN FORECLOSURE?

There have been a number of different actions taken by people
to keep from losing their homes in foreclosure. The first and most
widely used tactic is to demand that the party bringing the
foreclosure action does, in fact, have the standing to bring the
action. The most important issue of standing is whether that party
has actual possession of the “original wet ink signature”
documents from the closing showing they are the “holder in due
course”. As previously mentioned, in almost ALL cases the Plaintiff
bringing the action refuses to make these documents available for
inspection by the Defendant in the foreclosure action so they can,
in fact, determine the authenticity of those documents that are
claimed to be “original” and purportedly giving the legal right to
foreclose. The fact that the Courts allow this to happen repeatedly
without demanding the Plaintiff bring the ”wet ink signature
documents” into the court for inspection by the Defendant, begs
the question of whether some of the judiciary are involved in this

Fraud. Where is due process under the law for the Defendant when
the Plaintiff is NOT REQUIRED by the Court to meet that burden of
proof of standing, when demanded, to bring their action of
foreclosure?

One other option that has been used more and more frequently
in recent months to deal with foreclosure actions is the issuing of a
“Bonded Promissory Note” or “Bill of Exchange” as payment to the
alleged “lender” as satisfaction of any amounts allegedly owed by
the Defendant. As was earlier described, a “Note” is money and as
the banks demonstrated after the closing, it can be deposited in the
bank and converted to money. SOME of the “Bonded Promissory
Notes” and “Bills of Exchange” are, in fact, negotiated and credit is
given to the accounts specified and all turns out well. See (Exhibit
“B” para 12) The problem that has occurred is that MANY of the
“lenders” say that the “Bonded Promissory Notes” and “Bills of
Exchange” are bogus documents and are worthless and fraudulent
and they refuse to give credit for the amount of the “Note” they
receive as payment of an alleged debt even though they are given
specific instructions on how to negotiate the “Note”. Isn’t it
interesting that THEY can take a “Note” that THEY print and put
before you to sign at the closing table and deposit it in the bank
and it is converted to money immediately, but the “Note” that YOU
issue is worthless and fraudulent? The only difference is WHO
PRINTS THE NOTE!!!! They are both signed by the same
“borrower” and it is that person’s credit that backs that “Note”.

The “lenders” don’t want the people to know they can use your
“Prepaid Treasury Account”, just as the banks do without your
knowledge and consent. See (Exhibit “D”) for more information on
“Bills of Exchange”. The fact that SOME of the “Bonded Promissory
Notes” are negotiated and accounts are settled, proves beyond a
shadow of a doubt that they are legal SECURITIES just like the one
that the bank got from the “borrower” at the closing. Why then
aren’t ALL of the “Notes” processed and credit given to the accounts
and the foreclosure dismissed? Because by doing so you would be
lowering the National Debt and the bankers would make less
money!!!!

One very interesting thing that happens with these “Bonded
Promissory Notes” or “Bills of Exchange” that are submitted as
payment, is that they are VERY RARELY RETURNED TO THE ISSUER
yet credit is not given to the intended account. They are not
returned, and the issuer is told they are “bogus, fraudulent and
worthless” but they are NOT RETURNED! Why would someone
keep something that is allegedly “bogus, fraudulent and
worthless”? Could it be that they are NOT REALLY “BOGUS,
FRAUDULENT AND WORTHLESS” and the “lender” has, in fact,
actually negotiated them for YET EVEN MORE UNJUST
ENRICHMENT? That is exactly what happens in many instances.
There could be no other explanation for the failure to return the
allegedly “worthless” documents WHICH ARE ACTUALLY
SECURITIES!!! Does the fact that they keep the “Note” that was

submitted and refuse to credit the account that it was written to
satisfy, rise to the level of THEFT OF SECURITIES? This is just one
more example of the Fraud that is so obvious. This is but one more
example of the ruthless nature of those who would defraud the
people of this country.

CONCLUSIONS

One of the incredible aspects of this whole debacle is the fact
that the very people who are participants in this Fraud are victims
as well. How many bank employees, judges, court clerks, lawyers,
process servers, Sheriffs and others have mortgages? How many of
the people who work in law offices, Courthouses, Sheriffs
Departments and other entities that are directly involved in this
Fraud have been fraudulently foreclosed on themselves? How
many people in our military, law enforcement, firefighting and
medical fields have lost their homes to this Fraud? How many of
your friends or neighbors have lost their homes to these
fraudulent foreclosures? Everyone who has a mortgage is a VICTIM
of this fraud but some of the most honest, trusting, hardest
working and most dedicated people in this country have been the
biggest victims. Who are those who have been the major
beneficiaries of this massive Fraud? Those with the “superior
knowledge” that enables them to take advantage of another’s
ignorance of the law to deceive them by “studied concealment or
misrepresentation”. This group of beneficiaries includes many on
Wall Street, large investors, and most notoriously, the bankers at
the top and the lawyers who work so hard to enhance their profits

and protect the Fraud by them from being exposed. The time has
now come to make those having superior knowledge who HAVE
taken advantage of another’s ignorance of the law to deceive them
by studied concealment or misrepresentation to be held
responsible for that conduct. This isn’t just an idea. It is THE LAW
and it is time to enforce it starting with the criminal aspect of the
fraud! Under the doctrine of “Respondeat Superior” the people at
the top of these organizations are responsible for the actions of
those in their employ. That is where the investigations and arrests
need to start.

What is it going to take to put a stop to the destruction of this
country and the lives of the people who live here? It is going to
take an uprising of the people of this country, as a whole, to finally
say that they have had enough. The information presented here is
but one part of the beginning of that uprising and the beginning of
the end of the Fraud upon the people of America. It is obvious, as
has been pointed out here, with supporting evidence, that Fraud is
rampant. You now know the story and can no longer say you are
totally uninformed about this subject. This is only an outline of
what needs to, and will, become common knowledge to the people
and law enforcement agencies in this country. If you are in law
enforcement it is YOUR DUTY to take what you have been given
here and move forward with your own intense investigation and
root out the Fraud and stop the theft of people’s homes. Your

failure to do so would make you an accessory to the fraud through
your inaction now that you have been noticed of what is occurring.

If you are an attorney and receive this information it would do
you well to take it to heart, and understand there is no place for
your participation in this Fraud and if you participate you will
likely become liable for substantial damages, if not more severe
consequences such as prison. If you are in the judiciary you would
do well to start following the letter of the law if you haven’t been,
and start making ALL of those in your Court do likewise, lest you
find yourself looking for employment as so many others are, if you
are not incarcerated as a result of your participation in the fraud.
If you are part of the law enforcement community that enforces
legal matters regarding foreclosure you would do well to make
sure that ALL things have been done legally and properly rather
than just taking the position “I am just doing my job” and turn a
blind eye to what you now know. If you are a banker, you must
know that you are now going to start being held accountable for
the destruction you have wreaked on this country. You have every
right to be, and should be, afraid…….very afraid. If you are one of
the ruthless foreclosure lawyers that has prayed on the numerous
people who have lost their homes, you need to be afraid also. Very
VERY afraid. When people learn the truth about what you have
done to them you can expect to see retaliation for what you have
done. People are going to want to see those who defrauded them
brought to justice. These are not threats by any stretch of the

imagination. These are very simple observations and the study of
human behavior shows us that when people find out they have
been defrauded in such a grand manner as this, they tend to
become rather angry and search for those who perpetrated the
fraud upon them. The foreclosure lawyers and the bankers will be
standing clearly in their sights.

The question of WHERE DOES THE FRAUD BEGIN has been
answered. It began right at the closing table and was perpetuated
all the way to the loss of property through foreclosure or the
incredible payment of 20 or 30 years of payments and interest by
the alleged “borrower” to those who would conspire to commit
Fraud, collusion and counterfeiting and practice “studied
concealment or misrepresentation” for their own unjust
enrichment.

The simplest of analogies: What would happen if you were to
make a copy of a $100 Federal Reserve Note and go to Walmart and
attempt to use it to fraudulently acquire items that you wanted?
You more than likely would be arrested and charged with
counterfeiting under Title 18 USC § 474 and go to prison. What is
the difference, other than the magnitude of the fraud, between that
scenario and someone who makes a copy of a mortgage security,
and using it through foreclosure, attempts to fraudulently acquire
a property? Shouldn’t they be treated exactly the same under the
law? The answer is obvious and now it is starting to happen.

Title 18 USC § 474

Whoever, with intent to defraud, makes, executes,
acquires, scans, captures, records, receives, transmits,
reproduces, sells, or has in such person’s control, custody,
or possession, an analog, digital, or electronic image of any
obligation or other security of the United States is guilty of
a class B felony.

“Fraud vitiates the most solemn Contracts, documents and
even judgments” [U.S. vs. Throckmorton, 98 US 61, at pg.
65].

“It is not necessary for rescission of a contract that the
party making the misrepresentation should have known
that it was false, but recovery is allowed even though
misrepresentation is innocently made, because it would be
unjust to allow one who made false representations, even
innocently, to retain the fruits of a bargain induced by
such representations.” [Whipp v. Iverson, 43 Wis 2d 166].

“Any false representation of material facts made with
knowledge of falsity and with intent that it shall be acted
on by another in entering into contract, and which is so
acted upon, constitutes ‘fraud,’ and entitles party deceived
to avoid contract or recover damages.” Barnsdall Refining
Corn. v. Birnam Wood Oil Co. 92 F 26 817.

Here’s an all-too-common scenario these days: A property goes into foreclosure, the owner who buys the foreclosed property wants to evict the current tenants, who are living there lawfully. The owner decides to skirt the normal legal processes and engage in a self-help eviction. This is a very risky and potentially illegal course of action! Additionally when it is the lender evicting. If the foreclosure was Wrongful that makes the eviction Wrongful and substantial damages may be available as against the biggest banks in the world.

A self-help eviction can take many forms: changing the lock on a unit, adding a lock without providing keys to the tenant, cutting off utilities, and forcibly entering the rental unit and refusing to permit the tenant to reenter. These practices have one thing in common: to oust the tenant from possession without complying with the legal requirements for eviction.

California law is clear that an owner who has purchased property at a foreclosure sale cannot take possession after the foreclosure unless the occupants’ consent has been freely obtained or a judge has awarded possession following a court proceeding. See CCP §§1159-1179a. Also note that the law governing evictions after foreclosure is rapidly changing. In rent-controlled cities, the eviction of tenants of the borrower following foreclosure is prohibited unless the tenant defaults.

OwnerSecrets.com warns that self-help evictions can result in suits for the common law intentional torts of conversion, trespass to chattels, and trespass.

Self-help is never a good choice for evictions. Instead, evictions should always be handled through legal processes, generally by an unlawful detainer action, i.e., a fast, summary procedure that is generally limited to the issues of possession of the premises and associated damages.

On how to legally conduct a lawful eviction, see CEB’s online book Handling Unlawful Detainers and Landlord-Tenant Practice book (evictions following foreclosure are governed by both state and federal law and are covered in chap 8 of that book). On defending evictions, see CEB’s Eviction Defense Manual.

Also, check out our June programs on Representing Residential Landlords and Tenants in Unlawful Detainer Actions, which will be available On Demand beginning June 29th.

Market Watch- The real-estate firm controlled by the family of President Donald Trump’s son-in-law and senior adviser, Jared Kushner, routinely filed false paperwork with New York City, declaring it had no rent-regulated tenants in buildings it owned, when it actually had hundreds, the Associated Press reported. That allowed the company to move in and conduc […]

NY Daily News- A federal investigation into Wells Fargo has broadened to include its wealth-management division, according to a Wall Street Journal report Friday. Wells Fargo is wrestling with the aftermath of a scandal in its retail banking unit in which, among other things, employees opened up millions of fake accounts without customer authorization. The [ […]

Sacbee- A decade after the mortgage crisis swept California, home prices are rising, far fewer borrowers are under water, and the state’s economy and government’s finances are strong. Two little-discussed anti-foreclosure laws deserve much credit for slowing the initial devastation and for helping to stabilize the housing market and the economy. The rapid re […]

H/T GARY DUBIN LAW Justia Opinion Summary At issue in this appeal was whether a mortgage servicer could be considered a “debt collector” under California’s Rosenthal Fair Debt Collection Practices Act (the Rosenthal Act; Civ. Code,1 sec. 1788 et seq.). There was a split of authority among the many federal district courts that have considered […] […]

Bankruptcy RealEstate Insights – In re Delaware Sports Complex, LLC, 573 B.R. 543 (Bankr. D. Del. 2017) – The debtor, a limited liability company, purportedly entered into a ground lease before it was formed. The bankruptcy court considered the validity of the lease, whether the lease was properly terminated due to uncured defaults, and the effect […] […]

US NEWS- Big banks have less than a month to submit their capital plans to the Federal Reserve as part of their annual Comprehensive Capital Analysis and Review. Wells Fargo & Co (NYSE: WFC) is off to shaky start to 2018, and analysts say this year’s Fed stress test will be harder on Wells Fargo than most other […]

Reuters- Two of Wall Street’s largest Washington-based trade groups said on Tuesday that they were merging, as big banks rethink their lobbying strategies under the business-friendly administration of U.S. President Donald Trump. The Clearing House Association (TCH) and the Financial Services Roundtable (FSR), which both count the likes of Citigroup, Bank of […]

Bloomberg- Wells Fargo & Co. has emerged as the preferred financier for the U.S. gun industry. The bank has helped two of the biggest U.S. firearm and ammunition companies access $431.1 million in loans and bonds since December 2012, when the gun control debate gained steam after the school shooting in Newtown, Connecticut, according to data compiled […] […]

CNN- This month marks the tenth anniversary of the $29 billion US government-backed bailout of Bear Stearns. The collapse of this giant investment bank in March 2008, under the weight of its bad mortgage-linked bets, marked the beginning of the global financial crisis. To commemorate it, the US Senate plans to deliver a big gift […]

Lexology- Mortgage lenders using personal or commercial guaranties as recourse against default should take note of the Wisconsin Supreme Court’s decision this Tuesday in Horizon Bank, N.A. v. Marshalls Point Retreat LLC, No. 2016AP832, 2018 WI 19 (Mar. 6, 2018). In that case, amounts owing to Horizon Bank were secured by both a mortgage on real […] […]

Axios- “Lloyd Blankfein is preparing to step down as Goldman Sachs Group Inc.’s chief executive as soon as the end of the year, capping a more than 12-year run that has made him one of the longest-serving bosses on Wall Street,” the Wall Street Journal reports. Why he matters: “The departure would conclude a 36-year Goldman career […]

Biz Journal- Bank of America Corp. chairman and CEO Brian Moynihan, a Wellesley resident, earned over 20 percent more last year than he did in 2016, as his total compensation rose to nearly $40 million. Moynihan made $39.9 million in 2017, including the value realized on the vesting of previously issued stock awards, according to the […]

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL) ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET . . The planned show today will air next week. The outside AM station had a glitch. See you […]

CNBC- A group of nuns and religiously-affiliated investors said Wells Fargo & Co. has agreed to publish a review that shows the root causes of the systemic lapses in governance and risk management that have led to ongoing controversies, litigation and fines. As a result of the company’s commitment, the Interfaith Center on Corporate Responsibility will w […]

Everyone approaching or in retirement should know about the HECM program and how it might impact their retirement years. There’s absolutely nothing wrong with today’s HECM mortgages... no matter what you've heard in the past.

Chad was our ally until Trump included the country on his latest travel ban list. Chad pulled troops out of Niger and as a result four U.S. soldiers were ambushed and are dead. Could this have been prevented?

I’m not angry about President Trump winning, nor about Hillary Clinton losing. For me, now it's only about our country’s continued recovery from the worst economic meltdown in 70 years. But, President Trump is proving to be his own worst enemy.

This is not a "left or right" podcast. It's an interview with an attorney who represents illegal immigrants in Tucson's federal court and has for the last 15 years. So, he knows what's happening on the US-Mexico border... and what isn't.

The robo-witnesses called by the fake servicers to testify at the trial of a foreclosure action regularly lie about their personal knowledge and understanding of the loan process, the collection process and the foreclosure process. They are given a script the content of which is completely unknown to them. This is perjury when it happens […]

Failure to apply the law does not mean that the law should not have been applied. “I think you are confusing the current reality of multiple erroneous court decisions with the legal reality of what is meant to be followed by statutes and case decision is going back to a time before this country was […]

By J. Guggenheim, LendingLies http://apps2.leg.wa.gov/billsummary?Year=2017&BillNumber=2057&Year=2017&BillNumber=2057 The Washington State Legislature is one vote away from making changes to Bill 2057 that would be detrimental to homeowners. The changes would clear the way for anyone, without proof, to claim to be in possession of a promissory […]

Last night on the Neil Garfield Show, Charles Marshall brought up the idea of the use of the subpoena power of the court. I agree that this is a way of lawfully penetrating into the inner recesses of the alleged loan process. People ask me to whom should they issue a subpoena? Opinions vary. But […]

THE TRUTH IS COMING OUT SPELLING DOOM FOR LEGAL PRESUMPTIONS IN FAVOR OF BANKS TONIGHT ON THE NEIL GARFIELD SHOW LIVE AT 6PM EDT CALL IN 347-850-1260 OR LOG ON http://tobtr.com/s/10664835 When will Chase and the other TBTF Banks finally be seen as conspirators who collectively have lied and created false documents in nearly all foreclosures […]

Documents filed with the SEC are not evidence of the legitimacy of a PSA. The PSA was not filed with the SEC although the banks would like you to think so. The document, such as it is, was loaded onto the SEC website without any review or acceptance process. Anyone can load documents onto the […]

HOW TO BREAK THE BANKS Listen to Neil Garfield, Dan Edstrom, Charles Marshall and Bill Paatalo present their findings and tell you how to use them. Watch as the story unfolds with real examples that you can use for presenting a clear narrative in court. Think about what you can do to save your home […]

http://www.latimes.com/opinion/op-ed/la-oe-dayen-deregulation-bank-bill-20180309-story.html Next week marks the 10th anniversary of the run on Bear Stearns, the investment bank that collapsed under the weight of toxic subprime mortgages. Although JPMorgan Chase snapped up Bear Stearns for pennies on the dollar, this maneuver failed to stop the bleeding from […]

Thursdays LIVE! Click in to the The Neil Garfield Show Or call in at (347) 850-1260, 6pm Eastern Thursdays Prior to the securitization era began, no party to litigation was entitled to a legal presumption of facts when they had engaged in patterns of conduct in which they had forged, fabricated or otherwise attempted to […]

http://www.wect.com/story/37671186/new-billboard-accuses-mortgage-company-of-fraud WILMINGTON, NC (WECT) – A Wilmington resident and businessman has taken out a billboard on Eastwood Road accusing SunTrust Mortgage of dishonest business practices. The billboard has a picture of a home on it, and says “bogus loans” and “#SunTrustScandal,” directing people to […]

The US was a trial run and it worked perfectly for the investment banks. They got money from investors in exchange for what investors thought were RMBS. As they sold more and more of the junk “mortgage bonds” the Ponzi scheme grew geometrically and has now been institutionalized in the US. Globally the loan standards […]

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It’s always best to start at the beginning. All REMIC Trusts appear to be written up as common law trusts permitted under the laws of the State of New York or the State of Delaware. The problem with the REMIC Trusts is that they are not common law trusts nor trusts of any kind. Consider […]

Message of the day to homeowners and their lawyers: “stop admitting things that you assume are true. By admitting those facts you are hanging your client or yourself. Even the client is apt to say “Yes that is my signature on the note” when it has been described by opposing counsel as the original. In […]

Editor’s Note: S.2155 is known in Washington as the Crapo bill. A fitting name. Even Georgetown Law professor and former CFPB adviser Adam Levitin in a blog post warns the dangers of further bank deregulation. This bill functionally exempts 85% of US banks and credit unions from fair lending laws in the mortgage market By […]

First a little background. On February 6, 2018 a California federal judge certified a nationwide class of borrowers accusing Countrywide Financial Corporation of using inflated real estate appraisals to inflate its loan origination business from 2003 to 2008, overturning successor Bank of America’s claims that borrowers won’t be able to back up their racket […]

The Yvanova string of cases in California are based upon some vague notion of whether a void assignment (e.g., past the cutoff date) could be ratified by the trust, trustee or trust beneficiaries. Firstly, the trust can only operate through a trustee. That is black letter law in every state. In REMIC Trusts the Trustee […]

As Bill Paatalo (who brought this to my attention) says: “You can’t make this s–t up.” Reality is much stranger than fiction. This marks the point where we have entered the Twilight Zone in law where the rule of law is just a guidepost not to be confused with the real rule of men. Sheila […]

Thanks to Investigator Bill Paatalo for bringing this class action to our attention. http://homeloanjustice.com/ ATTENTION! IF YOU WERE WRONGLY DENIED OR DELAYED FOR MODIFICATION OF YOUR MORTGAGE PAYMENTS, YOU MAY BE ENTITLED TO SUBSTANTIAL COMPENSATION. CONTACT US NOW TO RECEIVE A FREE EVALUATION. Bank of America Lawsuit Information The U.S. Government intr […]

Upon doing the deposition of Joeffery Long Wells Fargo I was amazed that they could be so blatant as against the California Homeowners Bill of Rights but then again it is Wells Fargo Joffrey Long rough draft Joffrey Long exhibits

Robert Wilbert | Latest News | April 29, 2017 The Debtor testified that RCS notified him that on June 1, 2016, Ditech would begin servicing the Note. A Ditech representative contacted the Debtor in June by phone and informed him that according to Ditech’s records, the Debtor was $2,000.00 in arrears on the Note. The […]

I would only add that none of the Trusts actually come to own the debt, loan, note or mortgage anyway. The creation of “assignments” and “powers of attorney” merely create the illusion of a transaction that never occurred. Rod Ciferri is licensed in New York State. I strongly recommend that lawyers read the following excerpt […]

By Tony Sarabia Published in Los Angeles Daily Journal January 3, 2013 Litigators often reach for doctrines such as res judicata or collateral estoppel to narrow the scope of a case. Res judicata prevents re-litigation of the same claim that was litigated in a prior case. Collateral estoppel prevents re-litigation of the same issue that […]

Getting the 50,000 or three times the actual damages (b) After a trustee’s deed upon sale has been recorded, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall be liable to a borrower for actual economic damages pursuant to Section 3281, resulting from a material violation of Section 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 292 […]

2920.5. For purposes of this article, the following definitions apply: (a) “Mortgage servicer” means a person or entity who directly services a loan, or who is responsible for interacting with the borrower, managing the loan account on a daily basis including collecting and crediting periodic loan payments, managing any escrow account, or enforcing the note […]

2920. (a) A mortgage is a contract by which specific property, including an estate for years in real property, is hypothecated for the performance of an act, without the necessity of a change of possession. (b) For purposes of Sections 2924 to 2924h, inclusive, “mortgage” also means any security device or instrument, other than a […]

CIVIL CODE SECTION 2920-2944.10 2920. (a) A mortgage is a contract by which specific property, including an estate for years in real property, is hypothecated for the performance of an act, without the necessity of a change of possession. (b) For purposes of Sections 2924 to 2924h, inclusive, “mortgage” also means any security device or […]

Many of my readers are probably aware that California law allows commercial landlords to accept a partial payment of rent after service of a 3 Day Notice to Pay Rent or Quit and continue with an eviction action. This right to accept a partial payment after service of the notice is unique to commercial tenancies […]

On January 10, 2014 new RESPA rules went into effect concerning loss mitigation procedures. The new rules specify procedures a servicer must follow if a mortgage loan borrower requests loss mitigation assistance, such as a loan modification. The rules were drafted by the Consumer Financial Protection Bureau (“CFPB”). In drafting the loss mitigation requireme […]

CONSTRUCTIVE FRAUD: The tort negligent misrepresentation (also known as “constructive fraud”) requires that each and all of the following elements be proved: “(1) a misrepresentation of a past or existing material fact, (2) without reasonable grounds for believing it to be true, (3) with intent to induce another’s reliance on the fact misrepresented, (4) [ […]

CONCEALMENT FRAUD: The tort of deceit or fraud by concealment requires that each and all of the following elements be proved: “(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally […]

PROMISSORY FRAUD: The tort of deceit or fraud by a false promise requires that each and all of the following elements be proved: (1) a promise made regarding a material fact without any intention of performing it; (2) the existence of the intent at the time of making the promise; (3) the promise was made […]

PROVING FRAUD and or MISREPRESENTATION: DECEIT OR INTENTIONAL FRAUD The tort of deceit or intentional fraud requires that each and all of the following elements be proved: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable rel […]

PLEADING FRAUD / MISREPRESENTATION IN A COMPLAINT: In California, fraud must be pled in the complaint specifically. General and conclusionary allegations are not sufficient. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 74; Nagy v. Nagy (1989) 210 Cal.App.3d 1262, 1268) Unlike most causes of action where the “the policy of liberal construction of the ple […]